HSBC’s Gulliver: retail banking loss in China, India

He told shareholders at a meeting in Hong Kong on 19 May that the bank was losing money in the two markets, but said that HSBC would continue to operate its Chinese and Indian businesses because the bank relies on the yuan and rupee deposits.

HSBC CEO Stuart
Gulliver has expressed dissatisfaction at the performance of the
bank’s retail banking operations in India and China.

He told shareholders
at a meeting in Hong Kong on 19 May that the bank was losing money
in the two markets, but said that HSBC would continue to operate
its Chinese and Indian businesses because the bank relies on the
yuan and rupee deposits.

Making loss, but focus remains

Gulliver’s admission may come as a bit of a surprise:

India and China were
both highlighted as one of the 18 countries where HSBC is going to
target stronger focus in retail banking on 11 May.

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Asia overall is
targeted as HSBC’s hub and the bank confirmed during the Strategy
Day that particular retail banking investments would be made in
Malaysia, Singapore and Indonesia.

Focus on profitable markets

HSBC is revamping its strategy to focus on
profitable markets, such as Turkey,
Brazil and
Mexico, the bank revealed during a
Strategy Day on 11 May.

This announcement, in
turn, means that HSBC will retreat from futile markets, such as
Russia, or reallocate capital, such as in the US.

Having lost $7.74bn in 2009,
HSBC’s US arm posted a profit before tax of $454m.

HSBC’s Russian
retreat follows that of fellow UK-headquartered rival
Barclays’ announcement in mid-February.

Retail banking loss decreased by 63% YOY in
India

In India, the bank
reported a loss of $82m for the year to end-2010 from retail
banking and wealth management- a positive result, considering the
bank made a loss of $219m in fiscal 2009.

HSBC will be targetting mass affluent, non-resident Indians to
fund its retail and wealth management growth in India, the bank
said on 16 May.

As of end-April 2011, HSBC had 50 branches, 56 HSBC InvestDirect
outlets, 10 resource centres, 5 technology centres, 1.8 million
banking customers and over 35,000 staff in India.

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